Latest guidance extends “continuity safe harbor” to four years and includes other taxpayer-friendly modifications and clarifications to existing guidance.

On May 5, 2016, the Internal Revenue Service (IRS) issued Notice 2016-31 (Notice) to provide additional guidance regarding the “begun construction” requirement for renewable energy facilities seeking to qualify for the production tax credit (PTC) under Section 45 of the Internal Revenue Code (Code) or the investment tax credit (ITC) in lieu of the PTC under Code Section 48. The PTC and ITC were extended in December 2015 under the Consolidated Appropriations Act, 2016 (Budget Act). The Notice does not address the ITC extension for solar facilities, which the IRS intends to address in separate guidance.